The Galaxy Resources Limited (ASX: GXY) share price and the Orocobre Limited (ASX: ORE) share price will be ones to watch next week.
This follows the release of an update on their planned merger after the market close.
What was announced?
This afternoon Galaxy announced that the requisite majorities of its shareholders voted in favour of its proposed merger with Orocobre.
According to the release, 96.94% of Galaxy shareholders present voted in favour of the merger, with 98.69% of the votes cast in its favour.
What now?
With Galaxy’s shareholders voting in favour of the merger, its completion is close to being a formality.
The release explains that Galaxy will now seek approval of the scheme of arrangement by the Supreme Court of Western Australia. This will be at a hearing scheduled for 13 August 2021.
If the court approves the scheme at the hearing, Galaxy intends to lodge a copy of the orders with the Australian Securities and Investments Commission on 16 August 2021. At that point, the scheme will become effective.
If this occurs, Galaxy shares will be suspended from trading with effect from the close of trade on 16 August 2021. After which, implementation of the scheme is expected to occur on 25 August 2021, subject to the satisfaction or waiver of the remaining conditions precedent.
Finally, the new Orocobre shares will then commence trading on ASX on a normal settlement basis on 26 August.
Why merge?
Both companies expect the merger to create value for shareholders and leave the merged entity well-placed to benefit from increasing demand for lithium.
Back in April, Galaxy’s Chairman, Martin Rowley, commented: “This transaction has the potential to be a significant value-creating opportunity for Galaxy and Orocobre shareholders. The Scheme provides shareholders of Galaxy with the opportunity to share in the significant benefits of being part of a larger diversified group and the synergies expected to be available to help enhance and progress our portfolio of world class assets. The merged entity’s growth opportunities in both brine and hard rock position it uniquely to take advantage of expected rising EV demand for lithium.”
Investors certainly appear to agree. Since the announcement in April, the Galaxy share price is up 34% and the Orocobre share price is up 37%.
The post Galaxy (ASX:GXY) shareholders vote in favour of Orocobre (ASX:ORE) merger appeared first on The Motley Fool Australia.
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More reading
- Why ASX 200 lithium shares are charging higher on Friday
- Pilbara Minerals (ASX:PLS) share price rallies 14% in just four days
- Why the Vulcan (ASX:VUL) share price is running hot in August
- Why the Galaxy Resources (ASX:GXY) share price hit a 52 week high
- Why ASX lithium shares are beating the iron ore majors – again
Motley Fool contributor James Mickleboro owns shares of Galaxy Resources Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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